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Many still without insurance despite Affordable Care Act mandate to buy

As Monday’s deadline for health insurance enrollment approaches, multiple obstacles continue to keep many North Carolinians from signing up.

• Charlotteans Diane and Rodney Stoner earn too much to qualify for a federal premium subsidy. Self-employed with new businesses, they’ve decided to go without insurance and pay the penalty.
• Hairdresser Tina DeMarsico of Belmont earns too little to get a subsidy. She’s one of thousands of low-income North Carolinians who won’t have medical coverage because state officials declined to expand Medicaid.
• Like many young people, Kasey Stack, a Charlotte bartender and nanny, didn’t even know about the upcoming deadline or the Affordable Care Act’s mandate to buy insurance or pay a fine.

Despite the program’s disastrous debut – with the HealthCare.gov website malfunctioning for almost two months – about 6 million people nationwide have signed up for health insurance so far, up from 5 million just a week before.

But even with a recent surge in enrollments, tens of thousands of North Carolina residents will remain uninsured after Monday’s deadline.

The goal of the new law – often referred to as Obamacare – is to reduce the number of uninsured, estimated at 1.5 million in North Carolina and 49 million nationally last year. The majority of Americans get health insurance through work or federal programs, such as Medicaid for the poor, Medicare for the elderly or Tricare for military personnel. Most of those affected by the law are the uninsured and those who buy individual insurance.

The latest enrollment figures, announced Thursday, fell short of the Obama administration’s original goal of 7 million sign-ups, but met the 6 million projection for this year’s enrollment made last month by the nonpartisan Congressional Budget Office.

No new state numbers have been issued since the end of February, when more than 200,000 North Carolinians had signed up through the federal marketplace. That made North Carolina the fifth-highest among states for enrollment.

The law provides federal subsidies to make insurance more affordable for many. The Medicaid expansion was intended to cover those with the lowest incomes, but only 27 states and the District of Columbia agreed to offer that option. (North Carolina and South Carolina did not.)

DeMarsico, 48, the Belmont hairdresser, is among those who fell into the “coverage gap.” Her income of about $19,000 a year is just under the federal poverty level for a household of three. She would have been covered by Medicaid under the expansion. But without that, she makes too little to qualify for a subsidy and can’t afford the nearly $1,000 a month it would cost to buy insurance for herself, her husband and their 23-year-old son. She won’t owe a penalty because she didn’t have the Medicaid option, but that’s little consolation.

“I was excited that I might have insurance for the first time in 20 years,” DeMarsico said. “But it didn’t help me.”

The Stoners – Diane, 43, and Rodney, 45 – also were eager to have health insurance for the first time. They’re vegans and exercise enthusiasts who don’t take medicine and rarely see doctors. But they thought it was time to get coverage.

“We could be diagnosed with cancer tomorrow. We take care of our bodies, but we’re not bulletproof,” said Diane Stoner, a personal trainer and Iron Man triathlete.

But they were disappointed to find that their income of about $65,000 is too much to qualify for a subsidy. Without that, they said premiums of $700 to $800 per month are too expensive. “We don’t have that cushion to pay for that right now. We’re scraping by every month because of our business overhead,” said Rodney Stoner, a videographer and actor who plays a detective on the Lifetime TV series “Devious Maids.”

The penalty for going without insurance is $95 for an individual and $285 for a family, or 1 percent of income, whichever is higher. Fines will increase over time. For 2014, that means the Stoners will face a fine of about $650 that will come out of any refund after they file income tax returns in 2015.

“We make too much to be subsidized, but we make too little to afford it,” Rodney Stoner said. “I’m just going to say the heck with that, and I’ll pay the penalty.”

Demand increased

Last week, as Monday’s deadline approached, the Obama administration announced another in a series of extensions to ease the health insurance transition. This time, people who have tried to enroll will get extra time if they can show they were blocked because of technical problems with the federal website.

But in the meantime, interest in insurance heightened. Federal health officials reported 1.5 million visits to HealthCare.gov and 430,000 calls to the program’s call centers on Wednesday alone.

Charlotte-area agencies that assisted consumers with enrollment added extra appointments and scheduled more events to accommodate the demand.

“We’re reaching as many people as we possibly can,” said Sorien Schmidt, state director of Enroll America, a nonprofit group working with other social-service agencies to enroll the uninsured. “A lot of people have waited until the last month (to enroll).”

Federal data shows that 91 percent of North Carolina enrollees will receive government subsidies to help them pay for insurance. That’s the second highest rate in the nation, behind Florida. North Carolina residents have qualified for a total of $606 million in subsidies through February. The average yearly subsidy awarded to North Carolina enrollees was $3,320, the ninth-highest in the country, according to an analysis issued Thursday by the Kaiser Family Foundation.

What’s unclear is how many people with individual policies simply migrated to subsidized coverage without decreasing the state’s uninsured rolls.

“The question in the first year is: Do we reduce our uninsured rate?” said Adam Linker, health policy analyst for the N.C. Justice Center. “Or are we giving consumer protections for people who already had insurance?”

‘Young invincibles’ needed

The Affordable Care Act’s success hinges on the willingness of young, healthy people – known as “young invincibles” – to buy insurance.

In North Carolina, only 25 percent of enrollments so far are in the 18-34 age group. About 40 percent of the state’s uninsured are in this age group. Some of those who have enrolled in the marketplace probably had insurance previously. Federal officials had hoped that almost 40 percent of enrollees would be in the younger age group, but nationally the figure was 27 percent at the end of February.

Young, healthy customers are important because their premiums offset the claims for older customers who tend to have more health problems and higher medical bills. The latter group has signed up for insurance in larger numbers, partly because the law makes it illegal to turn away applicants with pre-existing conditions.

“There needs to be a good mix of young and healthy customers along with the older and less healthy,” said Bruce Allen, marketing director of Blue Cross and Blue Shield of North Carolina. “Rates go up if you’re only insuring the sick.”

If North Carolina enrollments stay flat in March for the younger demographic, insurance companies could pay out more money than they take in, and may raise rates next year, according to the Kaiser Family Foundation.

Indifference, ignorance and financial anxiety are evident among younger and healthier people, even though they are being courted by the federal government, advocacy groups and insurance companies. A blitz of TV ads has featured NBA stars Magic Johnson, Alonzo Mourning and LeBron James appealing to viewers of ESPN and other stations during NBA and NCAA games.

“In the beginning, there was a lot of talk that young people wouldn’t be interested in insurance because they think they’re invincible,” said Schmidt, the state director of Enroll America.

“Anecdotally, the people we’ve come across are very interested,” Schmidt said. “They worry about becoming uninsured after they can no longer be on their parents’ plan. The questions they’ve had have just been like anyone else.”

Still, when asked by the Observer last week, Kasey Stack, 28, the Charlotte bartender and nanny, said she had “no clue” about the approaching enrollment deadline or even that there was a federal mandate to buy insurance. “I could probably give you 10 other people that have no idea,” she said.

Stack said she pays taxes on about $12,000 a year from her jobs, including freelance marketing. At that rate, she would probably qualify for a federal insurance premium subsidy. But Stack, who hasn’t had health insurance since she graduated from college in 2008, said she’s healthy and pays only $120 a year for a gynecological checkup.

“That’s less than having to pay a bill for health insurance every month,” she said. “It’s just been so long since I’ve had health insurance, and I’ve been fine without it. I’m not that worried about it.”

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